Market Scene : Puffs of Worry Cloud Cuba Cigars : A big exporter, the industry has been left largely alone. But several factors threaten its prized product.

In the cult of the fine smoke, the region called the Vuelta Abajo is the be-all and end-all. It is Nirvana, El Dorado, The Source, all rolled into--a cigar.

Here, in a valley surrounded by gentle hills about 100 miles southwest of Havana, is where the most sought-after grade of corojo is grown, the tobacco used as the outside leaf of a cigar.

Referred to as “the wrapper” in English, corojo gives the cigar its color and the aroma that causes either expressions of ecstasy or choking, gagging protests.

By nearly all authoritative accounts, a cigar wrapped in oily and fragrant Vuelta Abajo corojo is the best in the world. Known to the cigar enthusiast as the Habana Puro, this cigar is the equivalent of wine produced by the great French chateaux.

As a major export earner, the cigar industry--largely free of the central planning and bureaucratic obstacles of Fidel Castro’s version of communism--has been competitive and profitable. But some believe that is changing and that the Puro is in trouble.

Shifting tastes, a major challenge from the Dominican Republic, the lack of a U.S. market because of a three-decade trade embargo, rumors of quality-control problems, a shortage of money and devastating weather have combined to weaken Cuba’s hold on production of the best cigar in the world.

It was the Habana Puro that Rudyard Kipling wrote about in his poem “The Betrothed.” “And a woman is only a woman, but a good cigar is a smoke,” Kipling intoned, anticipating the man who, asked what he would do if his wife objected to his Cuban cigars, responded, “Get a new wife.”

Cigar smokers from boardrooms to barrooms will pay almost any price and, in the case of some Americans, break any law to get a Habana Puro.

This is no small matter limited to a handful of plutocrats. Hundreds of millions of dollars and thousands of jobs are involved, as is one of the few positive economic sectors of Cuba under Castro.

In 1993, Cuba produced about 257 million cigars, with 200 million sold on the domestic market and the rest--by far the best--exported, mostly to Europe.

At a price ranging from $2 to $20 apiece, cigars rank behind only sugar, nickel and citrus fruits as an export earner and have long marked Cuba as world-class in this limited industry.

Still, 1993 saw a disastrous downturn in the Cuban cigar business; exports fell 10 million short of industry projections.

The root cause of the decline was a hurricane and unseasonable rains that hit the Vuelta Abajo at the peak of the February-March harvest period, destroying not only much of the precious crop but also most of the cloth that is used to tent or shade the wrapper leaf.

But even without the terrible weather, 1993 production would have continued a decline that was already beginning to threaten Cuba’s preeminence in the world cigar market.

Although neither government officials nor executives at Cubatabaco, the state cigar monopoly, responded to requests for interviews, other industry sources and diplomats based in Cuba provided some figures.

In the late 1980s, Cuba was exporting about 120 million quality cigars annually--about 90% the handmade varieties treasured by the premium-cigar fanatic.

By 1990, exports had dropped to 80 million, with the handcrafted cigars making up only about 75% of the total, probably the result of shortages in fuel, fertilizer and other products that followed the implosion of the Soviet Union and the rest of Communist Eastern Europe.

In 1991, total exports were 77 million, in 1992, 67 million, and last year, 57 million.

In a recent interview in Cigar Aficionado, a U.S. quarterly published in New York that chronicles the luxury cigar world, Cubatabaco Director Francisco Padron said Cuba will export no more than 50 million cigars in 1994.

But Padron projected that exports will climb to 80 million to 90 million by 1996.

Diplomats and independent foreign economists in Cuba are skeptical.

“Even if the weather holds up,” one international official said, “Cuba just doesn’t have the money to buy the fertilizers, the fuel, the tents needed to restore production to what it was, let alone make serious increases.”

In the past, the Soviet Union and its Communist allies either gave Cuba direct aid or traded goods for sugar at concessionary rates, which allowed the cigar industry to operate cheaply, the expert said.

“Well, now Cuba has to have cash. And while Cubatabaco was probably the most efficient industry in the country, the money it generates is sucked up by the government and not available for the cigar business. It’s the death of the Golden Goose.”

Perhaps, but Cuban tobacco officials claim the ear of Castro and are able to obtain otherwise scarce resources because he accepts their argument that high-quality cigars are important to the country’s world image.

A recent tour of the 100,000 acres that make up the tobacco fields of the lush Vuelta Abajo showed no shortage of tents--at least in this key growing area--and the current harvest appeared plentiful.

Officials of two of the Havana-area factories that turn out such quality brands as Montecristo and Cohiba also say that there has been no real shortage of quality filler and wrapper leaves, although the size of some wrappers has been difficult to maintain in severe weather, and cheaper brands have suffered.

Another problem is competition.

Until the Castro Revolution of 1959, there really was no challenge to the Habana Puro. But when the United States instituted an economic embargo in 1962 to punish Castro for his strident anti-Americanism, the cigar market shifted measurably as non-Cuban manufacturers sought to win the U.S. smoker.

Gradually, the once second-rate cigars of Honduras, the Dominican Republic and a few other Caribbean countries improved, particularly as the leaders of the old Cuban tobacco business went into exile, taking their seeds and expertise with them.

In the process, some of them have developed cigars very close to--although not yet the equal of--the Cuban products, targeting a newer clientele favoring a lighter taste. Cuba’s competition is particularly strong in the Dominican Republic.

The Habana Puro traditionally provided a strong taste and an aroma of pungent spices. While Cuban makers insist that their cigars remain the overwhelming favorite of true connoisseurs, they have also been quietly creating some new, milder versions.

Yet in spite of all the gainsayers, the pessimism and skepticism about the future of the traditional robust Cuban hand-rolled cigar seems premature at best.

According to sales figures in Spain and France, the two largest markets for Cuban cigars, not to mention the rest of Europe, the demand for the Habana Puro is increasing.

Marvin R. Shanken, the editor and publisher of Cigar Aficionado, said the world market for Cuban Puros, excluding the United States, is as many as 100 million cigars.

In a telephone interview, Shanken, who has visited Cuba five times in the last two years, quoted Padron as saying he could sell at least 20 million more in the United States if the embargo were lifted.

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In fact, the attraction of Cuban cigars for Americans is so strong that Shanken estimates that 6 million to 8 million of the banned cigars make it into the United States regardless of the law.

“Cuban cigars are world-class,” Shanken said, dismissing as jealousy or wishful thinking any claims by competitors that the quality of Habana Puros has fallen.

“Not at all,” he boomed over the phone. “Quality control is at the very highest levels. If you like a strong, robust taste with spice, the Cubans are as good as they ever were.”