Pretty much every day of the week there's a market happening somewhere on the island. The Friday market at Mogan seems to be one of the more popular but please don't let that put you off checking out any of the others. Mogan is a beautiful place to visit but I think the market there is THE most comercial, fully of holiday t-shirts and knock-off sunglasses. 

The further north you head the more typical Canarian produce and craft you're going to find. Teror market on a Sunday is my personal favourite and again the town is a beautiful place to visit. Here in the south the Maspalomas market on a Wednesday/Saturday is a nice mix between local craft and priduce and souveniers.

Don't buy from the first stall you see, go round the entire market and compare prices. If you catch someone haggling listen in and see how far down they get them. Don't pay the first price you're told!