Market day in Otavalo is a must for any traveler to Ecuador. Every Saturday, Amerindians from the surrounding villages gather to sell produce, livestock, woolen goods and other handicrafts. The market is well known by tour groups, so don't go expecting to be the only tourist, but do go: Otavalo is a unique Ecuadoran experience.

The people are a sight in themselves. The men of the area dress in traditional white pants, blue or gray ponchos and felt hats, and have their hair braided in long pigtails; the women wear white blouses with black sashes, skirts and lots of gold-colored necklaces. You're likely to see other distinctive outfits, as well, as people from surrounding regions also go to Otavalo to buy and sell goods.

There are several components to market day, some geared to the local inhabitants, some to the many travelers who visit Otavalo. It all begins at dawn, when the animal market gets under way at the edge of town. We found this the most interesting part of the market activities: As the sun comes up, the large, vacant lot is transformed into a place of squealing pigs and lowing cattle and hundreds of Amerindians milling about as they size up the merchandise or try to make a sale.

By 9 am, the activity moves to the hundreds of handicraft booths spread through the downtown. The center of the action is the Plaza de los Poncho, but vendors extend for several blocks in all directions. Almost any craft item produced in Ecuador (and many from elsewhere in Latin America) can be found in Otavalo, but the specialties are the colorful textiles (blankets, ponchos, sweaters, tapestries and handbags) produced in the area. Other good bets are musical instruments (charangos and zamponas—pan pipes), ceramics and hats (panama and felt). Be aware that pickpockets and petty thieves are active in the market—keep a close accounting of your valuables.

Plan on getting to the handicraft market early (it's best to overnight in the area and arrive before 10 am, when the tour groups descend on the place and the market gets very crowded). Be sure to bargain. Start at about 20%-25% below the initial asking price and go from there. Haggling is possible even if you have trouble with Spanish numbers: Bring a paper and pen to write the figures down. (Many of the vendors carry calculators to make the process easier.) If you can't make it to Otavalo on Saturday, you'll find a smaller selection of craft booths on other days, as well, especially on Wednesday. A large number of permanent craft shops and galleries are also located on the downtown streets near the Plaza de los Poncho.

If you still have energy after shopping, stroll through the food markets (one near the train station, one at the intersection of Calle Jaramillo and Juan Montalvo). Like the animal market, these are attended more by the local people than by travelers, but that's what makes them such interesting places to visit. You're likely to see women balancing baskets of produce on their heads, lots of live chickens and tables full of colorful foods—whole pigs, exotic fruits, piles of grains and vegetables.

Try to arrange one or two extra days to enjoy the small villages and beautiful countryside around Otavalo. There are several colonial haciendas-turned-hotels near Otavalo, so you have great bases from which to explore. Tour companies in Otavalo run guided excursions to the surrounding villages. Among the nearby towns are Cotacachi (known for its fine leather goods), Peguche (known for its musical instruments), Iluman (home of the Inti Chumbi handicraft cooperative) and Agato (where weavings produced on traditional back-strap looms are the handiwork of master weaver Miguel Andrango).

Spend some time at one of the beautiful mountain lakes in the area. Lago San Pablo is right outside Otavalo (you can hike there) and is large enough for boating—inquire at the Puerto Lago Hosteria (phone 6-263-5400, http://www.puertolago.com). Laguna de Cuicocha and the Lagunas de Mojanda are a little farther afield, but easily seen on day trips. Las Cascadas de Peguche (the Peguche Waterfalls) are another popular destination for hikers from Otavalo.

Bicycling can also be a great way to spend part of a day. You can pay a taxi to drop you off at a high mountain pass on the Selva Alegre Road. From there, it is an easy three-hour downhill ride to Otavalo with plenty of scenic vistas along the way (volcanoes, farms and lots of curious Amerindians).

The old colonial town of Ibarra (22 mi/35 km north of Otavalo) is a picturesque place to relax. Red-roofed, whitewashed houses line the cobblestone streets, which echo the clatter of horse-drawn carriages. The clacking of hammers and chisels can be heard at nearby San Antonio de Ibarra—the town is renowned for its wooden sculptures (but the quality varies greatly). To the south of Otavalo (20 mi/32 km) is the town of Cayambe, which is renowned for its cheeses and pastries. Otavalo is 35 mi/75 km northeast of Quito.

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