Breakfast at Hotel Milan is served on their roof terrace overlooking the plaza and church next door and the mountains in the distance. It was a pretty disappointing breakfast though - powdered coffee, juice and one scrambled egg with a piece of bread. Enough to get us going but definitely not enough to see us through until dinner.

Down in the plaza, a huge crowd of men surrounded a jeep. What initially looked a bit hostile, turned out to be men trying to be picked for a days work.

After breakfast, we walked around the town and down by the riverside. There was a bit of rain and it was bit colder than Quito. We went to the Panama Hat museum/factory to have a look around. Whilst they made hats on the premises, it seemed to focus on being a shop rather than being a museum.

Continuing down the riverside path, we came across a small museum with some old ruins and an indoor exhibition of Mexican art.

A few hundred metres down the road was the Museo del Banco Nacional with some great displays of Ecuadorian culture and the indigenous groups making up the country. One of the groups shrinks heads of humans and sloths - by law they are no longer allowed to shrink human skull, only sloths. There were shrunken skulls on display but they never actually explained how they do it.

Out at the rear of the museum were some Inca settlement ruins that we could walk around. They had also recreated an Inca garden with all the vegetables and plants that were grown by Inca's. To make it really authentic, they even had a couple of llamas grazing.

We walked back toward the centre along Calle Larga, one of the main streets full of restaurants and museums. We stopped in a German bakery for a late lunch. David was really hungry and ordered empanadas and cakes. Everything was huge when it arrived at the table and it was struggle to finish it even if it was really tasty.

Paja Taquilla was another hat shop, just a few doors down from the bakery, so we stopped in to see more hats. This shop was actually more educational than the museum we visited earlier.

Panama Hats actually originate from Ecuador and it's the only place where they are made by hand. All hats invariably have some mistakes/defects which determines the different degrees of weaving quality and final product. This of course then determines the price - one hat, which wasn't near 'top quality' but incredibly soft and finely woven cost $800 USD.

We also learned, and were given a demonstration, that all panama hats can be rolled up and stored for up to two weeks without losing their shape.

The name originally came from workers on the panama canal who used the hats for protection from the sun. At the opening ceremony everybody wore the hat and Ecuador's president gave the US' president, Roosevelt, a hat as a gift. Through a miscommunication in language, Roosevelt thought it was a gift from Panama and called it a Panama hat. Word spread in the news and it's popularity spread to be used in Hollywood etc. without anyone correcting the name, so it stuck.

David quite fancied buying a hat for himself but didn't want the typical and traditional black and white style. There was an 'avocado' style, with a smaller brim, in a nice shade of blue with orange trim. After a lot of humming and ha-ing he eventually became owner of 100% hand made Ecuadorian Panama hat.

We booked a tour for tomorrow to Cajas National Park, we could have taken a public bus there but the tour includes private transport to different areas within the park so hopefully we will see more.

Our walk back to the hotel took us past the municipal market. Even though David hates shopping, he really enjoys the colours and aromas of fresh food markets. Half of the ground floor was given over to fruit and vegetables while the other half was a butchery with lots of random pieces of meat hanging from hooks.

In the middle of the market there were some ladies whipping people, mainly children, with bunches of flowers and herbs. It smelled fantastic but what it was for remains a mystery.