HAVANA, Nov 4 (Reuters) - Exports of Cuba's world-famous Havana cigars should reach up to 160 million this year, well above the 1998 total, but below the official target due to rains in tobacco-growing areas, industry heads said Thursday.

The directors of state tobacco firm Habanos S.A., which controls production and sales of Havana cigars, said exports would finish 1999 at between 150 and 160 million, compared to 126 million last year. Heavy rains and high humidity levels, particularly in the western province of Pinar del Rio -- Cuba's tobacco-growing heartland -- harmed leaf preparation and undermined the ambitious official aim of 200 million exports this year. Total revenues from this year's exports should reach $260 million, up from $200 million last year, Habanos Vice-President Manuel Garcia told a news conference. That would make tobacco the Cuban economy's third biggest export earner after sugar and nickel. Cuba projects exports of 160 million cigars in 2000. Its biggest markets are Spain and France, seen importing 40 million and 18 million Havana cigars respectively this year. Habanos officials also announced plans for the formal launch of a new Cuban brand, the San Cristobal, to coincide with both the Ibero-American Summit and the 480th anniversary of the foundation of Havana later this month. Havana is hosting for the first time the annual meeting of heads of state from Latin America, Spain and Portugal. The Cuban capital was originally named San Cristobal by the island's Spanish colonial rulers. The San Cristobal brand, made with leaves from the lush Vuelta Abajo region of Pinar del Rio, will be marketed in various sizes named after Havana's colonial-era castles. Cuba's tobacco industry, which employs 250,000 people on the island of 11 million inhabitants, continues to suffer from a large black market trade in imitations, although efforts to stem that were being stepped up, the officials said. The illegal trade ``undoubtedly harms Habanos S.A. not only in its quantity of sales, but also in its reputation ... because 98 percent of the false cigars are of bad quality,'' said Habanos' recently-appointed new president Oscar Basulto. Cuban authorities were putting more resources into a crackdown on the illegal cigar business, resulting, for example, in the seizure of more than 900,000 cigars at Havana's international airport during 1998, the industry officials said. Various clandestine production centers in local houses had also been closed, they added. Asked about speculation of a possible future merger between Cuba's state cigar firm and another international company, the officials acknowledged there was ``plenty of interest from big companies'' without giving more details. They emphasized, however, that Habanos would only consider a merger of its marketing branch. ``Production will stay in Cuban hands,'' vice-president Garcia said. Although the U.S. market remains officially off-limits due to Washington's 37-year-old economic sanctions on Havana, an estimated six million Cuban cigars are still reaching its northern neighbor annually, the officials said. Most of those cigars were apparently arriving across the Mexican and Canadian border, or via the Caribbean, they added. If the sanctions were lifted, the U.S. market would absorb a minimum 60-70 million Cuban cigar exports, Garcia estimated. ``We are prepared for that,'' he said. Cuba's best-selling brands in recent times have been Cohiba, Montecristo, Romeo y Julieta, Partagas, and Quintero. Habanos is currently developing three joint ventures with companies from France and Spain and on the Canary Islands to enter the mini-tobacco market and diversify its industry.

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