The genuine, hand-woven "Panama Hat" is produced in Ecuador from "Paja Toquilla" straw which is a filament split from the leaves of Carludovica Palmata. Sometimes incorrectly called a palm the Carludovica Palmata is a tropical rain forest plant indigenous to several elevated regions relatively close to the Ecuadorian coast.

Except for the finishing operations at exporters' plants, most of which are located in Cuenca, the process of hat making involves mostly manual labour. Most of this is done by women of all ages in coastal and Andean rural communities who try to make a living from hat production under fairly precarious economic, social and health conditions.

Straw Production : The planting and harvesting of the Carludovica Palmata takes place largely in the Manabi coastal province. Once harvested the toquilla straw is then prepared from the plant's leaves and bundled ready for delivery to the weavers.

Weaving : Panama Hats are mainly woven in two regions of Ecuador: in and around Monticristi and other locations in the western coastal province of Manabi, and in the Andean highlands around Cuenca in the center of the Country. Weaving is the most labour intensive and unindustrialised part of the production process often taking place in small rural villages.

Finishing : The bleaching, dyeing, shaping and trimming of the hats to prepare them for sale largely takes place in and around Cuenca. The finishing is the most industrialised part of the process although some workers still finish hats by hand.