Bangladeshi fishermen in the Bay of Bengal on Thursday searched for about 130 people missing after a boat sank while carrying Rohingya refugees heading for Malaysia.

The boat went down off the coast near Bangladesh's border with Myanmar and about 13 passengers were reported to have survived, according to police and a Rohingya advocacy group.

Hundreds of thousands of Muslim Rohingya have fled Myanmar in past decades to escape persecution, and recent unrest has led to further exiles trying to reach Bangladesh and Malaysia.

"Thousands of boats go out to sea for fishing every day. We have asked them to watch out for bodies," Lieutenant Badruddoza, a coastguard commander in Teknaf on the southeast tip of Bangladesh, told AFP.

"The desperate families of the missing passengers have also been searching for bodies," he added.

Badruddoza, who only uses one name, said no sign of any wreckage or bodies had been found, and no coastguard rescue operation could be launched because the location of the sinking was not known.

One survivor being held by Bangladesh police told officers that the boat had 135 passengers on board and was heading south towards Malaysia.

Police said five other survivors had also been reported in Bangladesh, while The Arakan Project, a Bangkok-based Rohingya advocacy group, said seven survivors had reached Myanmar.

The UN refugee agency (UNHCR) expressed its dismay at the sinking and said people fleeing Myanmar and Bangladeshi migrant workers often paid smugglers for the chance of a better life in Southeast Asia.

"This is a tragedy," said UNHCR coordinator James Lynch. "Unscrupulous smuggling networks are exploiting the desperation of people facing violence and poverty."

The agency also appealed to Bangladesh and Malaysia to keep their borders open and accept refugees from the Rohingya minority trying to escape bloody communal violence in Myanmar.

At least 89 people have been killed and tens of thousands have fled their homes in a new wave of unrest sweeping Myanmar's western Rakhine state, where violence between Rohingya and Buddhists in June left dozens dead.

Since the unrest erupted, Bangladesh has been turning away boatloads of fleeing Rohingya, saying it is already burdened with an estimated 300,000 of the minority group.

Accounts differed on the date of the sinking, with police saying the accident occurred on Sunday but The Arakan Project saying its sources reported it happened overnight Monday to Tuesday.

Myanmar's 800,000 stateless Rohingya, described by the UN as among the world's most persecuted minorities, are seen by the government as illegal immigrants from Bangladesh.

Human Rights Watch warned this week of a potential "dramatic increase in the number of Rohingya taking to the sea this year" in the wake of the conflict.

Association of Southeast Asian Nations (ASEAN) Secretary-General Surin Pitsuwan said "the entire region could be destabilised" by the bloodshed in Myanmar.

The UNHCR in Malaysia has registered some 24,000 Rohingyas as refugees but community leaders estimate actual numbers in the country could be double that.

Malaysia largely turns a blind eye, allowing them into the country but denying them any sort of legal status that would allow access to health care, education, jobs and other services, activists say.