After seizing oil and grain fields to fund their offensive, IS jihadists have also taken control of "three-quarters of the production of cotton" in Syria, which was a relatively important exporter before the war, said Jean-Charles Brisard, a specialist on the financing of extremist groups.
Syrian cotton is an issue at the vaunted fashion houses in Paris. A buyer for haute couture collections at a top label said on condition of anonymity that they have become very vigilant over the origin of their fabrics.
"Our regular supplier sent us bolts of cloth without a tag of origin, and we asked our workshops not to touch them until we had all the required certificates," said the buyer.
"Can you imagine? Cotton supplied by Daesh," she added, using an Arabic acronym for the IS group.
Companies are keenly aware of the impact of a PR disaster in the clothing industry after the Rana Plaza factory in Bangladesh collapsed killing 1,138 people. Foreign labels that had sub-contracted work were accused of failing to push for safe labour conditions.
The key concern with Syrian conflict cotton is that it could make its way to international markets via Turkish wholesalers buying it at cut-rate prices from IS fighters desperate for cash.
IS-controlled parts of Syria are located close to Turkey, the EU's number two supplier of fabric and third for clothing, according to data compiled by the UIT, a French textile trade association.
Turkey, a net importer of cotton for clothes manufacturing, includes among its main suppliers "the United States, Greece, Uzbekistan, Egypt ... and historically Syria", said Emmanuelle Butaud-Stubbs, head of the UIT.
Syrian cotton exports to Turkey rose in the 1990s and early 2000s, but have fallen since 2008.
According to industry insiders questioned by AFP, IS has until just recently been sending to Turkey raw cotton grown in the Raqqa and Deir ez-Zor regions that account for a third of Syrian output.
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- IS selling raw cotton -
But Turkey has now officially refused to accept this cotton -- for undisclosed reasons but possibly due to pressure from Washington, according to these industry sources.
IS militants have begun to sell the raw cotton to intermediaries who transport it to processing centres located in areas under the control of Syrian President Bashar al-Assad's regime. Processing and export of cotton has long been a state monopoly in Syria.
Due to the conflict "the situation in Syria is very fluid and it is difficult to have a precise picture of what is actually happening on the ground," said Jose Sette, executive director of the International Cotton Advisory Committee (ICAC), a group that brings together cotton producing and consuming countries.
The four-year conflict has certainly led to a drop in cotton production. If before the war Syria was producing around 600,000 tonnes per year, that has dropped to 70,000, of which 3,000 is officially exported, according to ICAC estimates.
He said ICAC's understanding is that most of Syrian cotton is being used by the country's domestic textile industry, with very little left over for export.
And any Syrian cotton that is making its way to Turkey is probably going through unofficial channels and the ICAC has no information on this, he added.
But even assuming all of Syria's cotton production made its way to Turkey, a "highly doubtful" scenario according to Sette, this would only represent about five percent of the cotton used in Turkey.
"It seems grossly unfair to tarnish the entire Turkish textile industry on the basis of such a small and unsubstantiated number," said Sette.
"Taking into account all the elements ... the proportion of finished cotton products imported into France from Turkey that have been made from cotton grown on fields controlled by Daesh is near zero," said Butaud-Stubbs.
The luxury and sporting clothing group Kering, whose labels include Gucci, Puma, and Saint Laurent, said it was not particularly concerned about buying conflict cotton.
"The risk posed to Kering is minor because Turkey represents a minute part of the group's cotton purchases," a spokesman said.