The vessel, Al Kausar, was initially taken to El Hur, near the port of Hobyo in Somalia's semi-autonomous Galmudug state but was then moved to avoid approaching security personnel, pirates said.
Pirate leader Aw Kombe said negotiations were under way with businessmen in the port city of Kismayu for the release of Al Kausar, which was seized on Saturday.
"The traders want the dhow released without ransom but my friends say they (will) not release it without at least some cash," he added. "They are still discussing."
The Al Kausar was commandeered in the vicinity of Socotra Island while en route from Dubai to the northern port of Bosasso, according to United Kingdom Maritime Trade Operations (UKMTO), which coordinates shipping in the Gulf of Aden area.
A pirate who only gave his name as Aden told Reuters by phone from the town of Harardheere: "The pirate leader on board heard Galmudug forces advancing to attack it. The dhow has now gone far into the ocean but is still in Galmudug waters."
Harardheere was a major pirate base at the height of pirate hijackings of merchant ships in 2011.
Shipowners have become less wary of piracy after a long period of calm off the Horn of Africa, experts say, and some have started using a route known as the Socotra Gap, between Somalia and Socotra Island, to save time and costs. The route is considered riskier than others.
An oil tanker with eight Sri Lankan crew on board was hijacked last month but released within a few days after a clash with security forces.
"After three attacks, following a lull of five years, it is clear that Somali pirates are resurgent and intent on continuing attacks on commercial shipping," Yury Fedotov, the head of United Nations Office on Drugs and Crime, said in a statement.
Burhan Warsame, Galmudug's minister for ports and sea transport, told Reuters the same pirates from Puntland who seized the oil tanker last month - Kombe's gang - "must have hijacked this dhow".
But Abdirizak Mohamed Dirir, the former general director of the northern region of Puntland's anti-piracy agency, said the dhow's location made it likely that the pirates were from neighbouring Galmudug.
Kombe told Reuters there were four groups of pirates from Puntland "who are still in ocean hunting for ships to hijack".
"The pirates holding it must be our friends from Galmudug state," Kombe said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)