A fishing boat has picked up seven survivors from a ferry which sank off the Pacific island nation of Kiribati.

Authorities said six adults and a severely dehydrated 14-year-old were rescued after drifting for four days in the blazing sun without water.

They scrambled aboard a small wooden dinghy as the ferry with an estimated 50 people on board went under.

A New Zealand Defence Force Orion aircraft located the survivors and the fishing boat was diverted to pick them up.

There was no sign as yet of any other survivors.

A fishing vessel was diverted to the location and picked up survivors. ( Supplied: NZ Air Force )

New Zealand rescuers found the seven survivors on Sunday afternoon, a week after the ferry went missing.

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Defence Force Air Commodore Darryn Webb said a military plane dropped them supplies including food, water and a radio.

The Rescue Coordination Centre New Zealand started searching for the missing ferry and passengers on Saturday but found nothing.

"The Orion will continue to search the area, making every effort to locate any more survivors," Air Commodore Webb said.

Authorities have so far covered 55 per cent of the search area.

Kiribati is a remote, impoverished nation of 33 atolls that is home to about 108,000 people.

The MV Butiraoi, a 17.5-metre wooden catamaran, left Nonouti Island bound for South Tarawa on January 18.

The journey of 240 kilometres was expected to take two days.

Senior search and rescue officer John Ashby said the ferry was first reported missing to them on Friday.

The New Zealand Air Force will continue to search for the missing passengers and ferry. ( Supplied: New Zealand Air Force )

AP