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UPDATE 1-Traffic builds up along Rhine after vessel's engine failure

(Adds shipping official)

BERLIN, Aug 17 (Reuters) - Around 20 ships are stuck in traffic along Germany's river Rhine, where low water levels have already impeded shipping this summer, after a vessel's engine failure closed part of the waterway, authorities said on Wednesday.

A vessel with a 1,660-ton load was forced to drop anchor due to an engine failure, closing traffic between St Goar and Oberwesel, river police said.

"It's backing up," a spokesperson for the Federal Waterways and Shipping Administration told Reuters. "The berths are full all the way to Mainz."

Mainz is about 50 kilometres south-east of Oberwesel.

Downstream was worse affected. Traffic headed upstream has resumed since 1300 CET, the spokesperson said, adding that it could take another couple of hours before the other direction was freed up again.

Authorities stressed that the build-up was not caused by reduced water levels, which have hit record lows at some points due to a lack of rain.

Some vessels have been unable to sail as a result of the low water levels or have been forced to limit their cargo to avoid running aground.

However, Rhine shipping authorities expect the situation to improve in the coming days as rain is forecast for the region.

Water levels could rise "by 50 centimetres or more" by the end of the next week, the shipping authorities said, based on the forecast for the next two weeks.

Water levels at the Kaub reference point <WL-KAUB> were at 34 centimetres on Wednesday. Levels in the 30-35 cm range are acceptable for shipping - if expensive and with big losses in loadable cargo so as not to weigh down vessels too much.

(Reporting by Rene Wagner and Vera Eckert, Writing by Miranda Murray and Rachel More, Editing by Paul Carrel and Elaine Hardcastle)

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