* Sees output falling to 780,000 T as yields fall
* Expects distribution of fertiliser to fall sharply (Adds quote from note, details)
DAKAR Dec 17 (Reuters) - Ghana, the world's second largest grower, will produce around 780,000 tonnes of cocoa during the current 2013/14 season, well short of a target of 830,000 tonnes set by industry regulator Cocobod, Ecobank forecast in a note on Tuesday.
The Togo-based pan-African bank expects output from the West African nation to fall for the third straight season following a decision to phase out a fertiliser subsidy for farmers.
Ghana said in September that it would phase out the much-lauded fertiliser distribution programme over the next three to five years in its latest effort to cut costs amid weaker prices.
"The impact on yields in Ghana will be...significant, as the increased use of inputs has been the main factor in doubling Ghana's cocoa production over the past decade," Ecobank said in a note released on Tuesday.
The International Cocoa Organisation (ICCO) is predicting a global cocoa deficit in excess of 100,000 tonnes in 2013/14, due to both lower production and better-than-expected demand. Traders have bought heavily to head off the expected shortfall, driving up prices.
ICE March cocoa edged up $11, or 0.4 percent, on Tuesday to $2,803 a tonne, near a more than two-year high of $2,844 hit earlier this month.
Ghana's 2012/13 cocoa output fell to around 835,000 tonnes, from 879,000 the previous year, according to data published by the ICCO.
Cocobod currently pays roughly half the cost of fertiliser distributed to farmers. Ecobank said that only 300,000 bags of fertiliser would be available compared with 2 million in 2012/2013. (Reporting by Emma Farge; Editing by Joe Bavier)