What is called ‘panela’ in South America is the delicious brown sweetener known as ‘piloncillo’ in Mexico. It is massively produced in various parts of Colombia (it holds the “sixth place among the country’s crops, behind only coffee, corn, rice, bananas, and cotton” according to Wikipedia).
While being driven around to visit the archaelogical sites around San Agustin we had the opportunity to observe how panela is produced. As you can see in the photos below, the process starts with extracting the liquid from the plants. The sugar cane juice is then boiled down until it turns into a thick syrup. This is then poured into molds and let to cool down so that the product can be packaged and sent off to the numerous stores that sell it.
We have been using panela instead of sugar and loving the rich flavor it adds to the coffee and all the rest. We also frequently taste it in the lemonades they serve us with lunch in Ecuador.
Here’s some more info about how panela produced and used: http://southamericanfood.about.com/od/exploresouthamericanfood/a/Chancaca-Panela.htm or http://en.wikipedia.org/wiki/Panela