The vessel was transporting around 60 passengers from a camp to a local market, according to the UN's Pierre Peron in Myanmar, who said the majority were internally displaced people.
Rakhine state in western Myanmar is home to many IDP camps housing thousands of ethnic Rohingya, a largely stateless Muslim minority living in apartheid-like conditions after communal violence tore through the region in 2012.
"The majority of passengers on the boat were internally displaced people from the Sin Tet Maw camp in Pauktaw Township," Peron, a spokesman for the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) in Myanmar, told AFP.
A colonel from the state's security and border affairs ministry confirmed the accident but put the death toll at 14 according to official figures.
"The boat sank because of a heavy wave in the sea," the official said, requesting anonymity.
Rahkine is deeply scarred by communal violence between Buddhists and Rohingya Muslims that began in 2012, with the Muslim minority claiming to endure ongoing persecution.
Tens of thousands have fled for neighbouring countries like Thailand, Malaysia and Indonesia.
A regional crisis emerged last year after a Thai crackdown on people smuggling led gang bosses to abandon many Rohingya on land and at sea.
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