The ship, named MV Nur Allya, was heading toward the province of Southeast Sulawesi when it sent an emergency signal from around Buru Island in the country's Maluku Province, according to the agency.
Yusuf Latief, a spokesman for the National Search and Rescue Agency, said that the distress call indicated that there was a threat to the vessel.
According to the head of the local search and rescue office, Muslimin Samaila, after the loss of contact, rescuers rushed to where the ship's signal was last registered.
Samaila said that the rescue operation had been halted for the night due to unfavourable weather conditions but would be resumed on Monday.