Yes! A very practical example where cloth from fur would fit in perfectly, would be an underground scenario without sky, where cotton plants would look weird. But products from cloth might still be required to solve a certain problem.

Following the same line of though, a scenario could have sky islands with cotton and caves with wipfs and the player would have to decide which tools and things to produce first depending on what she wants to use for cloth (elevator and pickaxe vs. grappling hook and loam for example).