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Cuenca is a shopper's paradise. Ceramics and Panama hats are the best buys here, but, in general, you can find an excellent selection of folksy handicrafts, as well as some higher-end art and ceramic works. If you're here on a Sunday, you should hop on a bus to, or sign up for a tour of, the nearby villages of Sigsig, Chordeleg, or Gualaceo. They all host active Sunday markets where you can buy some very high-quality, locally produced handicrafts. All the local tour agencies offer day trips to these villages, and even on nonmarket days, you can find good arts and handicraft works here.

In Gualaceo, be sure to stop in at Tejemujeres (tel. 07/2839-676; www.tejemujeres.com), a local cooperative of textile artisans that produce and sell beautiful handcrafted sweaters. The river that flows right through Gualaceo is a popular spot for a swim or picnic on sunny days. If you make it to Chordeleg, be sure to check out the fine silverwork and jewelry in the numerous shops that ring the town's central park. I like Mar de Plata (tel. 09/2223-781) for good quality wares.

Arts & Handicrafts

Walk down any street in the center of Cuenca and you are sure to find scads of stores specializing in handmade crafts. I especially like Arte con Sabor a Café (tel. 07/2829-426), a gallery, coffee shop, and bar with a good rotating selection of local artwork and crafts; it's located on Paseo 3 de Bolívar 12-60 and Juan Montalvo. In the evenings, this place sometimes has live music.

Ceramics

For hundreds of years, Cuenca has been a center for ceramics. Walk into any museum in the area , and you'll see examples of beautiful pre-Inca jugs and vases. Artesa (tel. 07/2842-647), at the corner of Gran Colombia and Luis Cordero, keeps the tradition alive and is the best place in the city for hand-painted ceramics.

For a more personalized experience, I recommend visiting Taller E. Vega (tel. 07/2881-407; www.eduardovega.com), located just below the Mirador de Turi. Eduardo Vega is a ceramicist and one of Ecuador's most famous artists. Monumental sculptures and murals by Vega can be found around Cuenca, as well as in Quito. A visit to his hillside workshop and gallery is worthwhile just for the views, but you'll also have a chance to glimpse a bit of his production process and to buy from his regularly changing collection of decorative and functional works, handicrafts, and wonderful jewelry. Most organized city tours stop here. If you're coming to Taller E. Vega on your own, I recommend calling in advance to be sure it's open.

Jewelry

The spondylus shell was used as currency by early civilizations of Ecuador. At the custom jewelry shop Spondylus (tel. 07/2820-689), you'll find the shiny shell integrated into a wide range of pendants, earrings, and bracelets. You'll also find plenty of beautiful pieces in silver, either plain or with assorted gemstones. This shop is located on Gran Colombia 20-85, on the western edge of town.

Panama Hats

You may be surprised to learn that Panama hats have always been made in Ecuador: For generations, the people on the coast have been using local straw to create finely woven hats. The trade was moved inland, and Cuenca is now the major hub for the production of Panama hats. Homero Ortega P. & Hijos (tel. 07/2809-000; www.homeroortega.com) makes the highest quality Panama hats in the world; patrons include the queen of England. You can visit the factory and learn how the hats are made, and afterwards you can browse in the elegant boutique. The store is located a few minutes outside the center of town, at Av. Gil Ramírez Dávalos 3-86. Sombreros Barranco (tel. 07/2831-569, www.barrancospanamahats.com), at Calle Larga 10-41 between General Torres and Padre Aguirre; and K. Dorfzaun (tel. 07/2807-537; www.kdorfzaun.com), Av. Gil Ramírez Dávalos 4-34 and Alcabalas, also sell finely crafted hats.

Panama hats in Cuenca vary greatly in price and quality, running from around $10 to $12 (£6.65-£8) for a basic version, to around $150 to $250 (£100-£167) for a superfino. That superfino, though, may cost over $1,000 (£667) in a boutique shop in New York, Los Angeles, or London.

The Panama Hat -- If a rose by another name would still smell as sweet, then a hat, invented, designed, and manufactured in Ecuador, would look as stylish and protect you from the sun just as well if, for example, it were called a Panama hat.

The Panama hat is endemic to Ecuador, with Panama mistakenly receiving credit for the hat's origin over a century ago. These lightweight woven hats made a splash at the 1855 World's Fair in Paris. When they were shipped from Ecuador, they went via Panama, their last port of call before landing in Europe. By the end of the World's Fair, Panama had gotten the credit for producing the hat, and the Emperor Napoleon III became perhaps the first in a long line of celebrities associated with the headpiece.

As far back as the 16th century, Ecuadoreans were wearing and weaving hats from paja toquilla, a fiber from the leaves of the Carludovica palmata palm. The fibers from these plants were boiled and dried and then painstakingly crafted into the final product. Cities in Manabí province -- Azogues, Biblian, Sigsig, Montecristi, and Jipijapa -- developed into major centers for the production of these hats. A single artisan can take anywhere from 3 to 6 months to craft just one superfino (super-fine) hat. Major production was moved to Cuenca in 1836, and then spread throughout the provinces of Azuay and Cañar, now the largest centers of hat production in Ecuador. The popular style of today is still called Montecristi, after the town where to this day the finest quality panamas are still woven.

After taking Paris by storm, the hats began covering the heads of American troops during the Spanish-American war (1898). Gold miners who arrived in California by way of the Isthmus of Panama also donned these light and breathable hats, whose popularity escalated further when a photograph circulated of U.S. President Theodore Roosevelt wearing one. Other prominent politicians to wear Panama hats included Winston Churchill and Nikita Khrushchev. The Panama hat also has its fare share of Hollywood cred, having graced the heads of stars as diverse as Clark Gable, Humphrey Bogart, Orson Welles, Sean Connery, Paul Newman, Bruce Willis, and Danny Glover.

Today, despite the popularity of the Panama hat, few, except those who visit Ecuador, know its true origins. But a toquilla straw hat, by any name, keeps the sun off your head and looks pretty sharp to boot.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.