The most common and most likely answer to this crossword clue is the 7 letter word AGARICS
I've seen this crossword clue in The Guardian
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The straight part
We know that "Fungi" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case fungi = agarics.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does AGARICS mean?
AGARICS noun- Any of various fungi, principally of the order Agaricales, having fruiting bodies consisting of umbrella-like caps, on stalks, with numerous gills beneath.
- A dried fruiting body of a fungus formerly used in medicine (now Fomitopsis officinalis, formerly Fomes officinalis, Polyporus officinalis).