The country's number one export is black pearls, most of them produced at Manihiki and Penrhyn atolls in the Northern Group. You'll be offered pearls at small shops and even by street vendors, but stick to dealers who are members of the local Pearl Guild, including those I recommend. By and large, you will pay less for loose and set black pearls here than in French Polynesia.
There is a fine assortment of handicrafts to choose from here. Particularly good if not inexpensive are the delicately woven rito (white straw hats), which the women wear to church on Sunday, and the fine Samoan-style straw mats from Pukapuka in the Northern Group. Carvings from wood are plentiful, as is jewelry made from shell, mother-of-pearl, and pink coral. The most popular woodcarvings are small totems that represent the exhibitionist Tangaroa; they might be more appropriate for the nightstand than the coffee table.
Rarotonga is one of the region's best places to shop for tropical clothing, especially colorful cotton pareus, shirts, blouses, and dresses. Some of the works are more artistically creative than those in French Polynesia, especially one-of-a-kind pareus and women's apparel.
For years the Cook Islands government has earned revenue from the sale of its stamps to collectors and dealers overseas. The Philatelic Bureau, next to Cook Islands Post, at the traffic circle in Avarua, issues between three and six new stamps each year. All are highly artistic and feature birds, shells, fish, flowers, and historical events and people, including the British royal family.
Do Some Homework & Shop Around -- Anyone interested in buying black pearls should do some research beforehand, perhaps starting with excellent articles in the August 1985 and June 1997 issues of National Geographic. And don't buy without shopping around to compare quality, settings, and prices.