How did the Panama hat palm get its name? It is not a true palm. It is a palm-like tree that produces leaves suitable for making Panama hats. These broad-brimmed hats did not originate in Panama, but instead in the mountains and coastal regions of Ecuador.
After the Panama Canal opened, the tropics became a tourist destination. North Americans and Europeans began purchasing hats they saw indigenous people wearing and called them Panama hats. The finely woven Panama hat became a must-have for sun protection and style.
In response to growing demand, Ecuadoreans started making even more hats for sale, and this turned into one of the largest cottage industries in the world. The process involves harvesting leaves of the Panama hat tree, boiling them, and then combing them into thin straw. Loose strands of the straw are plaited for weaving.
It takes six leaves to produce enough fiber to make a standard grade hat. The weavers, mostly farmers in the Andes, can make a standard hat in a day or two. A fine grade hat can take up to three weeks.