CUENCA, Ecuador — Panama hats have made the leap from the heads of Hollywood icons and intrepid jungle explorers to the fashionable masses of Europe and the United States. Models are wearing them on catwalks and teenagers are sporting them at clubs.

But no matter how stylish, each of these hats has simple origins — just not in Panama.

The indigenous people of Ecuador have been weaving hats for hundreds of years, since well before the Spanish conquest. The misnomer arose in the early 1900s because so many of the hats were shipped via Panama and were wildly popular with the canal workers there.

Today, making the hats is a major industry in the Andean city of Cuenca, Ecuador. Weavers in poor mountain communities weave the hats by hand, then sell them to middlemen. Eventually, the hats — for which the weavers were paid between $2.50 and $6 — sell for more than $50 in Europe and the United States.

In the streets of Sigsig, a tiny Andean town in the middle of Ecuador, the culture of weaving is everywhere. Women weave hats as they sell chickens in the market, talk on street corners or sit in the park. Their hands know which of hundreds of straws to grasp and twist, so that the hats seem to grow magically and without thought. Every shot of color, every innovative weave, comes from the mind of an artisan, making each a functional work of art.

The most skilled Panama hat weavers live near the coastal town of Montecristi. There it's not uncommon to take months to weave a single hat. But the vast majority of weavers live in the mountains near Cuenca, in towns like Sigsig.

Hat weaving is a huge piece of Sigsig's economy and culture, but it's a piece at risk. Laura Morocho, 49, has been weaving hats since she was 7 years old. "This is our craft, and our parents teach us," she said.

Many of the hats woven there take about a day to make. After subtracting the price of straw, weavers can earn less than $2 a hat, making it nearly impossible to live off of weaving. As young people decide that weaving isn't worth the money it earns, some of the largest exporters worry that their supply line will dry up.

Cuenca is home to Homero Ortega P. & Hijos, Serrano Hat and K. Dorfzaun, the country's largest hat processors and exporters. All have been enjoying the increased sales brought by the hats' current popularity.

When the hats started appearing on the heads of Madonna, Justin Timberlake and a slew of other celebrities, it drove their revival on runaways and beyond, said blogger and fashion writer for New York Magazine Jessica Morgan.

But in Sigsig, not much has changed. The weavers sell their hats for to middlemen, who then sell them to Cuenca exporters for about $4 or $5.

The exporters have a long process to finish the hats. First they are washed, bleached or colored, and dried. At this point in the process they look baggy and bell-like. Excess fibers are cut off, the hat is pound to a sheen with a wooden mallet, ironed with an old-fashioned iron heated by coals and then shaped and styled in a machine press. Finally, a seamstress adds the finishing touches.

The exporter then sells the hat to a wholesaler in Europe or the U.S., for about $7 if the hat is partially finished, or $12 if it is totally finished. The wholesaler, who may sew its own brand’s label into the hat, can then double the price of the hat and sell it to a retailer, who again doubles the price. Thus, the hat that the weaver sold for $3 eventually nets $50.

The big Cuenca exporters are focusing on two ideas to keep their business growing. One, pay weavers more so they keep weaving, and two, find a way to keep more of each hat's final sale price in Ecuador.

Fernando Moreno, general manager of Serrano Hat, sits in a living room in Biblian, a small town outside of Cuenca. He is trying to convince a room full of women in their 50s and 60s to stop selling their hats to middlemen, and instead create a collective that would sell directly to the Cuenca exporters.

The women are skeptical. Not only have they sold their hats to middlemen their entire lives, but the challenge of organizing all the weavers in the town and guaranteeing a certain number of hats a month is daunting. Moreno argues that exporters are prepared to pay two to three times as much as the middlemen. The women warm slightly, but it's clear they aren't quite sold.

Along with encouraging weavers to keep hat production high, the Cuenca exporters have to fight increasing production of similar hats from neighboring countries Peru and Colombia, plus competition from cheaper paper hats from China.

Ecuador's hat exporters took their first step toward keeping more profit in Ecuador 15 years ago, when companies began exporting some finished hats instead of just the unshaped bodies. "Export as bodies brings in a small profit. Finished keeps more money here," Moreno said.

Working as a group, several Cuenca export companies are trying to further increase finished hat sales from Ecuador by launching their own brand, Alfaro Hats, in the U.S. this year. By establishing Alfaro Hats the companies stand to increase profits significantly by building a brand that cuts out the wholesaler and goes directly to the retailer.

As businessmen work on turning this moment in the spotlight into a viable long-term business plan, in Sigsig, busy hands are twisting straws into hats as they have for hundreds of years.

How to judge the quality of a Panama hat:

All Panama hats are not created equal. The best hats don't look or feel like they are made of straw — they are silky smooth and so delicate they look like fabric at first glance. Hats are often referred to as standard, fine, extrafine and superfine. There is no firm guide for these definitions, but in general the more fibers used, the higher the rating. There is also a numerical rating based on fibers per square inch that is applied to Panama Hats, but it is not used consistently by different dealers. The lowest-quality hats are rated zero, while the absolute finest hats, which are hard to find, are rated 40 or above. According to Moreno or Serrano Hat, counting the rings in the crown of a hat is not an accurate way of determining its quality; it is best to look closely at a section of the hat's crown for the fineness of the weave.

http://www.globalpost.com/dispatch/the-americas/091008/panama-hats-ecuador