Grain ETF Attracts Nearly 300 Million Yuan in Net Inflows Over Past 5 Days, Institutions Say Medium to Long-Term Sector Logic Remains Solid

Why does the Food ETF continue to attract funds despite short-term negative news?

The food sector experienced volatility and adjustments today. Institutions point out that recent influences on the food sector are mainly threefold: 1. Inflation expectations and delayed Federal Reserve rate cuts. 2. Starting March 14, all phosphate fertilizer and phosphate-containing fertilizer exports have been fully suspended, short-term logic for midstream agrochemical companies is affected. 3. Domestic wheat auctions have increased, easing supply tightness expectations and temporarily suppressing prices.

Institutions believe that the long-term logic of the sector remains solid, and there is still room for growth: 1. On one hand, geopolitical conflicts keep agrochemical costs high, and biofuels still have growth potential as alternatives to petrochemical fuels. 2. On the other hand, the tight balance of grain supply and demand remains unchanged, with ongoing gaps in corn production and consumption, and the stock-to-use ratio for soybeans and wheat is tightening. 3. The “14th Five-Year Plan” proposes a goal of reaching a comprehensive grain production capacity of 1.45 trillion jin, and long-term policies supporting fertilizer supply for spring planting are favorable for the food sector, providing long-term policy support.

As of 15:00 on March 19, 2026, in the China Securities Index Food Industry Index (399365), the component stocks saw declines: Oriental Tower led with a 9.07% drop, Xingfa Group fell 7.18%, Zangge Mining dropped 7.10%, Xin’an Shares declined 6.83%, and Yuntu Holdings decreased 6.20%. The latest price of the Food ETF (159698) is 1.11 yuan.

In terms of liquidity, the Food ETF had an intraday turnover of 8.99% and a transaction volume of 119 million yuan. Looking at a longer period, as of March 19, the average daily trading volume over the past week was 1.48 billion yuan. Over the past five trading days, the ETF has attracted a total of 294 million yuan in funds.

The Food ETF closely tracks the China Securities Index Food Industry Index, which reflects the stock price changes of listed companies related to the food industry on the Shanghai, Shenzhen, and Beijing Stock Exchanges.

Data shows that as of February 27, 2026, the top ten weights in the China Securities Index Food Industry Index (399365) are Dabeinong, Longping High-Tech, Beidahuang, Shennong Seed Industry, Salt Lake Shares, Quanyin High-Tech, Yasheng Group, Yuntianhua, Nongfa Seed Industry, and Zangge Mining, collectively accounting for 50.93% of the index.