This blog post is part of a special series based on the April 2026 Commodity Markets Outlook, a flagship report published by the World Bank Group. This series features concise summaries of commodity-specific sections extracted from the report.
The World Bank Group’s fertilizer price index rose more than 12 percent in 2026Q1 (q/q), marking its sixth increase in seven quarters. By April 2026, the index had reached its highest level since October 2022, driven mainly by export disruptions related to the closure of the Strait of Hormuz. Urea prices recorded the largest gains, while increases in other fertilizers were more moderate. Despite the recent surge, price increases remain well below the spikes seen in 2021 and 2022, when fertilizer prices jumped by more than 100 percent and 55 percent, respectively, amid supply disruptions in Russia and Belarus—two of the world’s key fertilizer suppliers. The more subdued response this time reflects three factors: (i) growers in the Northern Hemisphere had already secured much of their fertilizer supply; (ii) natural gas prices (the main production cost for nitrogen-based fertilizers) rose less sharply than after Russia’s invasion of Ukraine; and (iii) trade flows from the Middle East are increasingly being rerouted through land corridors, bypassing the Strait of Hormuz. The fertilizer price index is projected to rise by more than 30 percent in 2026, supported by higher input costs—particularly for nitrogen- and phosphate-based fertilizers—and resilient global demand. Prices are expected to ease in 2027 as exports recover and new supply comes online. However, risks remain tilted to the upside if elevated energy prices persist and shipping and production disruptions linked to the Strait of Hormuz continue beyond 2026Q3.

Nitrogen (urea) prices climbed above $850 per metric ton in April, up 80 percent since February and the highest level since April 2022. The surge was driven by major export disruptions following the closure of the Strait of Hormuz, a key shipping route for fertilizer exports from the Middle East, which accounts for nearly one-quarter of global urea exports. Supply pressures have intensified due to production outages across the region. The Islamic Republic of Iran halted ammonia production amid the conflict, while Qatar suspended production of urea, ammonia, and sulfur after damage to key facilities. India has also reduced urea and ammonia output because of lower LNG supplies. Tighter supply and potential export curbs from China have added to market concerns, pushing fertilizer affordability for farmers to its weakest level since mid-2022.

Urea prices are projected to rise nearly 60 percent in 2026 before easing in 2027 as Middle East exports recover and natural gas prices moderate. However, risks remain tilted upward, including prolonged shipping disruptions from the Middle East, further trade restrictions, and higher input costs—especially natural gas prices—all of which could push urea prices above their 2022 average.

DAP (diammonium phosphate) prices rose more than 10 percent in April after remaining relatively stable earlier in the year. The increase reflects tightening supply conditions and rising input costs, particularly sulfur prices, which have doubled since January. China’s move to tighten exports has also added upward pressure on prices. As a result, the DAP-to-food price ratio—which had declined for six straight months through February—rebounded in March and April.

DAP prices are projected to rise nearly 6 percent in 2026 before falling about 10 percent in 2027 as new production capacity comes online. However, major risks remain. Renewed export restrictions by China or a prolonged closure of the Strait of Hormuz could significantly disrupt global fertilizer trade, especially since the route handles a large share of global sulfur and ammonia shipments—both critical inputs for DAP production. Supply concerns have also intensified after Morocco’s OCP accelerated maintenance at its phosphate facilities, likely in response to disruptions in sulfur and ammonia markets.

MOP (muriate of potash) prices rose more than 5 percent in 2026Q1 and were nearly 17 percent higher than a year earlier. Despite the increase, affordability relative to food prices has remained close to pre-2020 levels. The market is becoming increasingly well supplied, supported by higher exports from Belarus following the easing of U.S. sanctions, as well as stronger shipments from Russia, Canada, and  the Lao People’s Democratic Republic. Supply conditions are expected to remain comfortable through 2026 and 2027.

MOP prices are forecast to rise about 12 percent in 2026 before easing 6 percent in 2027. The broader outlook remains balanced, as potash markets are less exposed to Middle East disruptions than other fertilizers. Still, sharper-than-expected increases in urea or phosphate prices could prompt farmers to cut MOP use to manage costs, weakening demand and exerting downward pressure on prices. In the longer term, major new production capacity—especially in Canada, the world’s largest potash producer and exporter—could add further downward pressure.

Compliments of the World Bank
The post World Bank | Fertilizer Prices Surge as Strait of Hormuz Disruptions Tighten Supplies first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The Commission published its fifth State of the Schengen report, reviewing developments in the Schengen area over the past year and setting priorities for the year ahead. The Schengen area continues to demonstrate resilience, underpinned by collective efforts at both EU and national level.
The Schengen area is one of the European Union’s most tangible and valued achievements, enabling a more than 450 million EU citizens to travel, work, study and live freely across borders while supporting trade, tourism and freedom of movement of goods vital to the European economy, alongside strong cooperation to protect the Union’s external borders.
The 2026 State of Schengen Report highlights significant achievements during the past year. These include a better protected external border and a decrease of 26% in illegal border crossings in 2025 compared to 2024. Joint efforts also resulted in more effective returns of persons without a right to stay in the EU, with a 28% return rate in 2025 – the highest return rate in the past 10 years. A key milestone for external border protection was the full launch of the Entry/Exit System (EES) in April 2026, delivering on a stronger, more digitalised Schengen area. Already in the first 6 months of operation, Member States registered over 66 million entries and exits and 32 000 persons, who had no right to enter the EU, were refused. The Commission also adopted the EU’s first-ever Visa Strategy in January 2026.
At the same time, the report showed that challenges remain requiring actions at EU level and by Schengen States. This is particularly important in the context of today’s geopolitical environment which calls for reinforced collective responsibility to ensure that the Schengen area remains secure, united and resilient.
The priorities for the fifth Schengen cycle (2026-2027) will focus on consolidating achievements, addressing remaining gaps, and enhancing preparedness to meet current and future challenges. Work will continue in the following areas:

Supporting Schengen’s external dimension: including with the upcoming proposal for a revised Visa Code which will address security elements of the EU visa policy. In addition, developing partnerships with key countries to attract talent for innovation and enhance the EU’s global competitiveness will also be prioritised.
An integrated external border for a secure Schengen area: advancing the digitalisation of procedures, with the continued implementation of the new Entry-Exit System and the launch of ETIAS, the new travel authorisation for visa-exempt travellers. This will be further supported by the effective implementation of the Screening Regulation and reinforced contingency planning under the Pact on Migration and Asylum.
An effective return system: Schengen states should further strengthen operational capabilities and tools to support returns, while making use of Frontex support. An effective implementation of the new return border procedure – a key feature of the Pact on Migration and Asylum – will further strengthen the EU’s return system.  The Commission will also present a legislative proposal on return digitalisation in 2026, with a view to developing digital case management systems in this area. This will further contribute to reducing the administrative workload of national authorities, simplifying and automating processes.
Consolidating the operational framework for internal security cooperation:  through continued structured dialogue facilitated by the Schengen Coordinator with all Member States concerned or affected by internal border controls, in view of the gradual lifting of controls.
Strengthening the Schengen governance with strategic funding under the next long-term budget (MFF) and more systematic country-specific discussions. At EU-level work should continue to complete Cyprus’ Schengen accession, to reach full implementation of the Schengen rules relevant to internal security in Ireland and to continue strong engagement with enlargement countries.

Next steps
The Commission invites the Schengen Council to discuss the 2026 State of Schengen report and adopt the 2026-2027 priorities at the Justice and Home Affairs Council in June.
Background
The Commission has been evaluating annually the State of Schengen since 2022 as part of a reinforced Schengen governance framework. This exercise marks continued delivery on the Commission’s initiative to reinforce the common governance of the Schengen area and ensure a structured, coordinated and common response to its challenges
 
 
Compliments of the European CommissionThe post European Commission | Report Shows Schengen Area Continues to be Resilient and Ready for Future Challenges first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Blog | Non-bank financial institutions (NBFIs) are on the rise. This blog shows how shifts in their borrowing and investment portfolios constrain financing for euro area firms and affect the transmission of monetary policy.
Two trends have diverted financing away from euro area firms in recent years. First, euro area NBFIs have shifted their portfolios towards foreign assets – particularly US equities. Second, banks have channelled more lending to NBFIs outside the euro area. Together, these cross-border flows via NBFIs contributed to a sluggish recovery in firms’ external financing over recent years.
NBFIs are reshuffling their portfolios at the expense of euro area firms
NBFIs, such as investment funds and insurers, play a crucial role in financing firms through both equity and bond markets. In recent years, euro area NBFI securities holdings have grown substantially, rising from around €11 trillion in early 2018 to €17 trillion by the end of 2025 (Chart 1, panel a). Investment funds account for roughly 60% of the total.[1] Strikingly, however, the composition of these portfolios has been shifting away from European assets more recently.[2]
Most of this reflects the exceptional performance of US stocks – especially in the tech sector. This has systematically raised their value relative to European holdings. But the changing composition of NBFIs’ portfolios is not just a valuation story: NBFIs, particularly investment funds, do not just hold US equities, they have also been buying them.
Since late 2023 euro area NBFIs have increased their allocation to US corporate equities by around 2.7 percentage points through net purchases. At the same time, they have reduced their allocation to euro area corporate equities by about 1.5 percentage points (Chart 1, panel b, left). The reallocation has come, to a lesser extent, at the expense of euro area government bonds and bank equities.

Chart 1
Developments in NBFI equity and debt portfolios

a) NBFI debt and equity holdings, by issuer sector and geography

b) NBFI holding of firm equity

EUR trillion

percentage points

Source: ECB (SHSS), ECB calculations and Henricot, D., Mendicino, C., Molestina Vivar, L. and Pelizzon, L. (2026).
Notes: For panel a) amounts are in market value. The holdings are for euro area NBFIs (ICPF, IF, MMF and OFIs). For panel b), left-hand scale, the chart shows NBFIs’ cumulative transaction-based firm equity portfolio share changes for NFCs in the euro area, the United States and other countries in relation to the fourth quarter of 2023. NBFIs include ICPFs, IFs, MMFs, and OFIs. The right-hand scale is based on a coefficient from a regression of euro area NFC equity shares on US NFC equity shares in euro area NBFI portfolios, based on sector-level data and controlling for NBFI sector and quarter fixed effects (2014-25).
The latest observations are for the fourth quarter of 2025.

These developments clearly matter for the financing of euro area firms. Research by Henricot, Mendicino, Molestina Vivar and Pelizzon finds that increases in the share of US corporate equities in NBFI portfolios are associated with declines in the share of euro area equities. An increase of 1 percentage point in the share of US equities in NBFI portfolios is associated with a 0.3 percentage point reduction in the share of euro area corporate equities (Chart 2, panel b, right).[3] While the substitution effect is not one-for-one, it is meaningful and material. And it suggests that the growing appetite for US assets may be squeezing out equity financing for European businesses.
Banks are lending more to non-bank financial institutions and less to firms
A similar dynamic is playing out on the banking side. Bank exposures to NBFIs have grown steadily in recent years, reaching around 11% of total assets by the end of 2025 (Chart 1, panel a).[4] Most of this takes the form of direct loans predominantly to investment funds and other financial institutions – mainly short-term collateralised loans (reverse repos). A substantial share of these loans is directed to entities operating outside the euro area.[5]

Chart 2
Bank loans to non-banks and firms

a) Bank asset-side exposure to NBFIs

b) Bank loans to non-banks and firms

percentages of total assets

LHS: percentage points; RHS: coefficient

Source: For panel a) ECB (Supervisory Reporting) and ECB calculation; for panel b) ECB (Supervisory Reporting, AnaCredit), Orbis, ECB calculations and Li, Ma, Mendicino, Supera (2025).
Notes: Panel b), left-hand scale, shows cumulated change relative to the fourth quarter of 2023. NBFIs stands for non-bank financial institutions. Bank loans exclude loans held for trading. The sample consists of a balanced sample of significant institutions reporting under IFRS. The right-hand scale is based on a coefficient from a regression of firm borrowing, on the dynamics of bank lending to NBFIs by each firm’s relationship banks, between 2019-25.
The latest observations are for Q4 2025.

It is especially notable that this trend has come at the expense of lending to firms (Chart 1, panel b).[6] Research by Li, Ma, Mendicino and Supera shows that when the bank a firm borrows from increases its NBFI lending by 1 percentage point, that firm’s access to bank credit falls by 0.55 percentage points on average (Chart 1, panel b). Crucially, firms cannot easily make up the shortfall by turning to other banks or NBFIs for alternative funding.[7]
In the current geopolitically uncertain environment[8], reverse repos to NBFIs are an attractive option for banks, particularly those with weaker capital positions. It is therefore unsurprising that this expansion aligns with the risk-averse attitudes banks have reported in recent surveys.[9]
Conclusion
The two trends described in this post point in the same direction: cross-border flows via NBFIs weigh on the recovery of firm financing over the ECB’s easing cycle.
When euro area investment funds reshuffle their portfolios in favour of US equities, European firms find it harder to raise capital in markets. When banks shift towards foreign NBFIs over domestic borrowing firms, European firms find it harder to secure loans. The result is a sluggish financing recovery that is lagging behind policy rates.[10] This is a reminder that as NBFIs grow in global importance their cross-border behaviour deserves close and sustained attention from policymakers.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
 
 
Compliments of the European Central Bank The post ECB | How Cross-Border Flows via Non-bank Financial Institutions Constrain Financing for Euro Area Firms first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.